Could Microsoft Acquire Epic Games? GamePro Editor Thinks So

RESEARCH TRIANGLE PARK – Will Epic Games be acquired by Microsoft?

As Epic’s management team heads west for the annual Game Developers Conference in San Francisco this week, GamePro magazine is predicting that Microsoft will buy the fast-growing game technology firm.

“Microsoft will buy Epic Games for $1 billion this summer,” wrote Travis Moses, assistant editor at GamePro, in the magazine’s new issue.

Epic and Microsoft are practically joined at the hip already. Microsoft’s game publisher division paid Epic millios of dollars to develop the award-winning “Gears of War” in November of 2006 for the Xbox 360 platform. Gears won multiple awards and sold several million copies. The online version of the game remains among the most popular on the Xbox Live network.

The two companies will be exhibiting at the GDC side-by-side. And speculation is quite strong that Epic may announce a Gears sequel.

However, Microsoft would be interested in acquiring more than game development in an Epic buy, according to Moses. Epic also licenses its Unreal game engine to developers around the world who produce titles for Xbox 360, PlayStation 3 and other platforms as well as PCs.

“Epic Games is one of the few highly regarded indie developers … partly for their games but mostly for their Unreal engine technology,” Moses wrote. “Microsoft has lots of cash on hand, and in buying Epic, could collect royalty rights for Unreal technology across other platforms.

“Given Epic’s tight partnership with Microsoft, along with widespread use of the Unreal engine, and this move makes a lot of sense, particularly in light of [Electronic Arts]’s Pandemic/BioWare merger [as] well as the Activision/Vivendi shockers.”

Microsoft did Bungie, the develop of the wildly popular Halo game franchise, so a deal for Epic would follow precedent. Bungie was spun back out as a private company in octomber. (The Skinny erred in reporting earlier that Bungie was still part of Microsoft.)

Epic’s Unreal Tournament 3, its newest release, is currently under development for the Xbox 360 platform and is due to release in May, according to GamePro. As for a possible Microsoft acquisition – well, stay tuned.

(Editor's note: The Skinny has been updated to correct an error about ownership of Bungie.)